Today, I am grateful for having decided on a professional property management company. And thankful they were dedicated enough to leave church -on a Sunday morning- to call the police and rush to the unit, all to protect the interests of a client. It really feels good to have that kind of protection and that kind of management.
I've read many posts about the pros and cons of hiring a property manager versus self management. I was doing fine self managing. I felt like I could not spend money on a PM as long as I was doing a good job myself. Until one day I realized I wasn't. At first my interest in real estate was literally everything about it, from beginning to end. However, over time it became more and more apparent that my focus in real estate is the numbers, spreadsheets, financing, P&L, and the renovations and design. Seeing a finished property come out beautifully is a great and exciting feeling. Anyone who has done a BRRRR renovation knows how exciting it is to see the finished product. Tenants are interesting, its great to get to know who you are renting to, and hear how they like your apartment, and I like making sure they are comfortable and happy, but eventually I learned that managing tenants and screening tenants, was not really my thing. To manage tenants, you have to stay up to speed on all the local, state and national legalities, which change on a constant basis. That's a big complex topic, and frankly while that's interesting, I'd rather spend my time finding properties, improving existing properties, researching and financing the next deal, or just enjoying a nice dinner, these are all things that I am better at (especially enjoying a nice dinner). But I continued to self manage because I was afraid to give up control, until one day it became obvious that my disinterest with tenant management was resulting in slower turnovers. Things like taking too long to list a property for rent, or too long doing a background check, too long calling references, or worrying too much about which applicant was the right applicant. This created stress rather than excitement. It also caused lost revenue. In this business, the adage "time is money" could not be truer. Disinterest can be costly on the bottom line. It's hard to feel proud of a property success knowing it could be managed better. So the solution became clear. Firing the disinterested party (me) was the most humane thing I could do! So I fired myself!
I decided to try a PM with 1 property at first, just to see what its like to let someone else worry about it, and to see whether they could manage it better. I have now had the services of a property management company for over two years and they have most of my units now. Am I happy? Well, it isn't that simple, it is a multifaceted response. I still haven't given up entire control, I simply haven't progressed to that stage. Thankfully, my PM is patient with me and has allowed me to ease into taking a backseat. But I let the PM have 100% control over tenant management. And that has made an enormous difference. Vacancy times are considerably shortened, they have a giant pool of applicants, they manage the pet applications and fees, they do the background checks more thoroughly, they call references, and they use their experience choosing applicants, and they handle the move out and damage assessment and deposit refunds. More importantly, they keep up to date on the legal and liability aspects of property management, which lets me focus on what I am good at.
Today was unusual though, as it really taught me the beauty and benefits of having a property manager. One of our units was listed online by a scam artist. Unfortunately, a young couple was naïve, having believed they were renting the unit for less than 1/2 the listed price, and they paid 2 months rent over the internet to a scammer. However the property manager noticed the day before that something wasn't right about the keys, as 1 key was missing, so she was concerned and ordered a lock change. The couple came to move in, and found that the lock was changed, but this did not deter them. Rather than calling the person who presumably rented the unit to them, they instead called a lock smith to change the locks!! Thankfully, the PM received word that this was happening and they called the police, met the police there, and the police halted the locksmith from changing the locks, and the police informed the couple that they have been scammed. This was completely sad for the young couple, who we feel bad for. However, had the PM not rushed over there, and had the couple managed to change the locks and move in, we would be dealing with completely different problem, an eviction. Thankfully, the PM knew what to do, how to handle it fast, who to call, and what the action steps to take, and she took those steps at lightening speed. Had we not had a professional PM, we would have had to figure out how to handle this ourselves, and by the time we got advice the couple would certainly have succeeded in moving in, and then we would have had to go through the courts and eviction. Based on the experience today, I think it pays to have professionals doing a complex job, and sometimes the job is complex. Todays situation had a lot of legal ramifications, and if you don't have legal resources at beck and call, and experience with similar situations, you might make the decision more slowly, and slower decisions like this might be costly. Ending up with an eviction could have costs thousands, not to mention the additional time, energy, and anxiety.
I couldn't be happier about being fired, especially since I replaced myself with someone who is a true professional!
I feel that I made the right decision based on my knowledge and interests.
Now I can have a nice dinner and not worry about it! And start looking for another property!
When I am on vacation in the future, I won't have to worry either. After all, I invested in real estate so that I could afford more vacations. So maybe in the near future I should start thinking about a vacation? :)
After all of this, my advice is, if you decide to try a PM, look for those with the best reputations, credentials and experience. Look for one who invests in property management, industry conferences, education and knowledge, and has legal resources available for fast advice. That's a big part of what you are paying for. While it's essential to the task, the PM job is not just about collecting the rent.
